Each week in our Sector Snapshots (click link for sample copy), we highlight the current trends in sector trading ranges, breadth, percentage of stocks above their 50-days, P/E ratios, and relative strength. In our relative strength charts, we highlight how each sector has performed versus the S&P 500 over the last year. For each sector, rising lines indicate the sector is outperforming the S&P 500, while falling lines indicate underperformance. In each chart, we also note each Fed meeting over the last year. Red dots indicate meetings where the Fed lowered rates, while black dots indicate meetings where the Fed left rates unchanged.
While the Financial sector has led the recent rally, a look at the sector's long-term relative strength shows that they are no where near breaking the downtrend they have been in for at least a year now.
While everyone is focused on the Financials, the Energy sector has been enjoying its position out of the spotlight. While the sector was killed in the Summer and Fall when the decline in oil kicked into high gear, since then, energy stocks have been steadily outperforming even as oil remains near its lows. Just imagine what could happen if oil actually started to rally.
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All of my bank stocks go up and then go down more than they went up. I think we're all tired of the banks.
Posted by: elementaryfinance | January 29, 2009 at 11:41 PM